Brandwatch: Tim Hortons

Tim Hortons is one of North America’s largest QSR chains. The chain was started in 1964 by Canadian ice hockey player Tim Horton, and merged with Burger King in 2014, to become Restaurant Brands International.

The brand now operates approximately 4,800 restaurants globally, the vast majority of which are in Canada and the United States

Yet, according to Kevin Hydes, chief commercial officer at Tim Hortons, the brand shortly intends to announce more outlet openings, with the aim ultimately to have a Tim Hortons open in every major town and city in the UK.

As well as speak with Hydes to understand more about Tim Hortons plans, MCA travelled to a Tim Hortons outlet in Harlow, Essex to gain a customer perspective.

Focused on expansion

While choosing the UK as the location for its first European outlet in June 2017, the brand eschewed the traditional flagship opening in London, instead opting to open in Argyle Street in Glasgow, a nod to the close historic connection between Scotland and Canada.

Since then, the brand has concentrated largely on opening in local clusters in Scotland, Northern Ireland, and the North of England; “micro-market” clusters being “operationally beneficial” says the company. It currently has 32 company-owned stores open and trading in the UK, with 14 outlets in Scotland alone.

According to Kevin Hydes, the current geographical focus on the north of the UK will not continue for much longer. “There will be a lot of announcements coming out in the next two to three weeks with regards to other towns and cities that will be opening this year,” he says, alluding to imminent store openings in new regions. Hydes also states that, “we will bring the brand across the South East over the course of the next 15-18 months.” Currently Tim Hortons’ sites in Cardiff and Harlow in Essex represent the southern-most locations within the brand’s store network.

It was back in October 2020 that the Canadian QSR brand first announced an acceleration in its UK expansion. It stated it had plans to “open an outlet in every major city and town over the next two years.” Using the ONS definition of a major town or city (which is a location with a minimum population of 75,000) this would suggest that Tim Hortons is aiming for a network of around 110 outlets by this date, all of which will be company owned. “We don’t franchise,” says Hydes. “We own and operate all of our restaurants, and we intend to keep it that way.”

“We are on track to achieve our goal,” he adds, “And certainly from a 2022 perspective, it will be a very busy year. We are comfortable that we’ll be able to meet our expansion expectations.”

Drive thrus and favoured locations

The main trading model that Tim Hortons is adopting in the UK is predominately centred around the drive thru. “It’s really, really important to us,” emphasises Hydes.

Currently half of Tim Hortons’ UK sites have a drive thru facility, with all announced pipeline sites also including a drive thru. Trading hours in most stores are typically 6am to 11pm, with store sizes ranging from approximately 2,000 to 6,000 square feet.

As well as kiosk technology being present inside most of Tim Hortons’ stores, the brand’s drive thru sites come with digital menu boards. Hydes says that a digital offer reduces customer wait time, provides higher basket spend, and delivers flexibility in terms of communicating its menu offering. “It is perhaps a longer list of products than you would tend to get in a McDonald’s, but that is purposeful. Tim Hortons is a brand that is still in its infancy in the UK, and we want to make sure people understand what we have available.”

With drive thrus being such an integral part of the brand’s offer, it comes as no surprise that it is favouring opening in sites that are close to arterial roads, but not necessarily in standalone locations. “We prefer to have other retail adjacencies because we find that that drives additional footfall into the restaurants,” says Hydes, before admitting that demand for such sites is currently “highly competitive. We are not the only people looking to build out a drive thru business across the UK right now.”

Hydes goes on to say that there are no immediate plans to open any Tim Hortons sites in travel hubs such as railway stations due to a lack of all-day trade, but the brand may decide to open in a motorway service station at some point in the future.

Going multi-channel

During the various lockdowns of the past 18 months both the drive thru and delivery have been key trading channels for Tim Hortons, with delivery “helping to expose the brand to new customers and pick up market share,” says Hydes. Even now, post reopening, demand for delivery is said to have held up well. Delivery is available across 90% of the estate via a combination of Uber Eats, Deliveroo or Just Eat - depending on the store location.

Unlike the situation in Canada, Tim Hortons in the UK does not currently have its own app available for consumers to use, a distinct rarity for a QSR brand.

In Canada, Tim Hortons’ loyalty programme, called Tims Rewards was introduced in 2019 and is increasingly being linked to its app. In North America, digital sales now account for 30% of total sales, with the majority coming through its loyalty programme.

Both an app and a loyalty programme could follow at some point as part of the Tim Hortons offer in the UK. “We are looking to enhance digital technologies for our customers, that is something we are working on,” says Hydes.

What is the Tim Hortons experience like?

To experience Tim Hortons first-hand, MCA visited the Harlow store which opened in May 2021 and trades every day from 6am to midnight, with breakfast served until 11am. The 4,500 square feet site, part of the Queensgate Centre, traded as a Chiquito-branded outlet until early in 2021.

As well as room for more than one hundred diners inside, there is a single drive thru lane, plus additional outdoor seating capacity. The site is prominently located next to a roundabout on a main A road. Within 200m, are several competing operators including McDonald’s, Pizza Hut, Costa Coffee and Subway.

Inside the store there is a high ceiling featuring exposed metal beams and pipework, while floor-to-ceiling windows give the interior an airy and contemporary feel. The walls feature a combination of whites, greys plus images to do with coffee, Harlow, and of course – given its Canadian heritage – ice hockey.

All staff members were wearing face masks despite trading restrictions having been lifted.

Three banks of back-to-back self-service order kiosks greet customers as they enter and head towards the store’s main front counter area. Six kiosks are provided in total, however, two of the kiosks were not working at the time of MCA’s visit.

The kiosk’s hardware, software and order process felt very familiar and intuitive, providing customers with a similar experience to that offered by nearby rival McDonald’s. The post 11am, main day menu offering allows customers to browse up to twelve different pages of products – including pages offering all day breakfast, vegetarian products, ‘brand new’ products, options under 400 calories, signature offerings such as Timbits (sweet round pastry) and ‘double double’ coffee, as well as Tim Hortons’ rival to McDonald’s Happy Meal, a kids meal called Timmies Minis.

Once a customer has made their selection and paid for their order via the kiosk, they receive a receipt and order number to collect it at the counter when it’s ready. This last stage is achieved through a combination of staff shouting out order numbers, as well as a digital screen highlighting orders that are ready for collection. Currently, table service is not available at Tim Hortons, but Kevin Hydes suggests it may be introduced in future.

He describes Tim Hortons as offering a “crossover experience” to customers - part quick service restaurant, part coffee shop – suitable for many different eating or drinking out occasions. The variety of seating on offer at the Harlow store certainly provides dine-in consumers with plenty of choice in terms of where and how to sit, with informal sofas positioned alongside more formal seating.

At Tim Hortons Harlow the drive thru experience is fast and efficient and features the latest technology such as digital menu boards and clear communication via the order station. But as is the case with all QSR players that operate drive thrus, there is an opportunity to enhance the customer journey and make it slightly less functional.

Dayparts and demographics

Breakfast is a key daypart for Tim Hortons, with the brand currently running a £1.99 breakfast meal deal offer. Mid-morning and mid-afternoon are also important times of day and are supported by Tim Hortons extensive drinks and baked goods offer, which appeal to these snacking occasions.

In addition, Hydes suggests that there is a big opportunity for Tim Hortons to strengthen its existing evening offer and it has plans to boost this daypart.

Hydes highlights the deliberate mass-market appeal of the brand, saying: “Part of the beauty of the Tim Hortons brand is that it has purposely been built upon being a brand that is available and accessible to all, and is certainly a non-exclusive brand.”

He goes on to suggest that the customer profile shifts slightly younger into the evening, with 18-25 year olds becoming a more significant part of the customer mix. “Post-pandemic we are seeing a lot more gathering,” he says, “people are using Tim Hortons as a facility to meet up with friends.”

In terms of demographic appeal, MCA observed a wide range of customers while at the Harlow store, from mums with young children through to older consumers.

“We have people aged six to 70 coming in store,” says Hydes. “And that gives us a really fantastic position moving forward because if we can trade all day parts with all demographics, then that really does give us a huge opportunity to be successful, wherever we take the brand.”